Mahindra set to finalise deal to sell stake in SsangYong Motor soon

During a digital press conference today, Mahindra and Mahindra said it is likely to name the new buyer sometime next week.
By : HT Auto Desk
| Updated on: 01 Jan 2021, 03:40 PM
The logo of SsangYong Motor is seen during the Seoul Motor Show in South Korea. (File photo) (REUTERS)
The logo of SsangYong Motor is seen during the Seoul Motor Show in South Korea. (File photo) (REUTERS)
The logo of SsangYong Motor is seen during the Seoul Motor Show in South Korea. (File photo) (REUTERS)
The logo of SsangYong Motor is seen during the Seoul Motor Show in South Korea. (File photo)

Mahindra and Mahindra is getting closer to finalise a deal sell its stake in its Korean subsidiary SsangYong. The Indian carmaker is likely to seal the deal by the end of next month and an announcement of the new buyer may happen as soon as next week.

During a digital press conference today, Pawan Goenka, MD at Mahindra and Mahindra said that after the deal is finalised, the Indian carmaker’s stake in Ssangong will go down to only 30 per cent. Presently it holds 75 per cent in the Korean company.

Similar Cars

Find More Cars
Mahindra Kuv100 Nxt (HT Auto photo)
Mahindra Kuv100 Nxt
1198 cc | Petrol | Manual
Mahindra E20 Nxt (HT Auto photo)
Mahindra E20 Nxt
₹ 6 to 8 Lakhs Expected Price*
Mahindra E2o-plus (HT Auto photo)
Mahindra E2o-plus
Electric | Automatic
Mahindra Xuv300 (HT Auto photo)
Mahindra Xuv300
1197 cc | Petrol | Manual | 17 kmpl
Mahindra Ekuv100 (HT Auto photo)
Mahindra Ekuv100
₹ 8.25 to 10 Lakhs Expected Price*

In December, Mahindra's South Korean arm SsangYong Motor had filed for bankruptcy. The Korean automaker has outstanding loans aggregating to 100 billion Korean Won (around 680 crore).

In April this year, Mahindra and Mahindra board had rejected a proposal to inject any fresh equity into SaangYong Motor. Following Mahindra’s earnings in the quarter to March, where the Korean unit accounted for 80% of losses, Mahindra said it was ready to cede control of SsangYong.

Mahindra acquired the South Korean SUV maker after the 2007-08 global financial crisis when several Indian and Chinese companies were vying for foreign firms to access new technologies and achieve a global footprint. The Indian carmaker had acquired the loss-making SsangYong in 2010 but failed to turn it around since then despite several attempts.

SsangYong not only failed to deliver on its SUV promise but also became a liability for the Mumbai-based firm as Mahindra continued to make new investments without adequate returns.

Mahindra lost substantial market share in the SUV segment amid intensifying competition from rivals Maruti Suzuki and Hyundai Motor.

SsangYong has been struggling with deteriorating earnings since 2017 when it slipped into the red with a net loss of 66 billion wons as against a net profit of 58 billion wons in 2016. In 2018, its net loss rose to 62 billion wons and then ballooned to 341 billion wons in 2019.

Battered by the pandemic, SsangYong has continued to post losses through the March, June and September quarters. It has accumulated operating losses of 309 billion Korean won (close to 2,100 crore) in the nine months to September despite reducing fixed costs.

First Published Date: 01 Jan 2021, 03:40 PM IST
Recommended For You
View All

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city